Show Notes

Transcript:

Felix: Today I’m joined by Josh Sprague, from orangemud.com. That’s O-R-A-N-G-E-M-U-D.COM. Orange Mud sells hydration packs for runners and riders, accessories, and lifestyle packs, and was started in 2012, and based out of Castle Rock, Colorado. Welcome, Josh.

Josh: Thanks for having me.

Felix: Yeah, excited to have you on. So, yeah, tell us a little bit more about these hydration packs, and all the other accessories that you sell.

Josh: Sure. So, we started the business based upon our HydraQuiver Single Barrel, which is a 25-ounce water bottle based pack that mounts on your back. And the logic to it was that by putting it on your upper back, it won’t move around, it won’t bounce, it won’t squeeze your lungs like a normal chest pack, or waist pack, or, sorry, backpack would. It won’t squeeze your waist like a normal waist pack would, and then I have always hated carrying handhelds, because to me it’s just weird to put weight at the end of your arm and basically run with a weight while you’re running.

So, by putting it up high, it makes it nice and stable, and that was kind of the whole, only single idea we had when we started the business. And to be honest, I didn’t think we’d have any ideas past that, but little did I know it quickly blossomed, and next thing you know, we’ve got 27 different unique product items on the market that we’ve designed.

Felix: Very cool. So, I want to talk about the [inaudible 00:02:08] in a bit. What’s your background, though? How did you get involved in an industry like this?

Josh: So, my background was actually in manufacturing. I ran a $20 million medical device manufacturing company that really made all sorts of stuff for spinal implants and whatnot, and even though it didn’t really translate at all to soft goods like backpacks, I did, throughout the course of my career, I spent a lot of time training and racing, and iron man, adventure racing, mountain bike racing. And I just found that there were big gaps in the market for a variety of products, so I kind of took the design for manufacturability mindset that I’d had for years in the medical device space, and just thought, “You know what, we’ll start a business and see what can go of this,” and little did I know it’d actually take off.

Felix: How did you recognize that there were these gaps in the marketplace? Was there a way for you to verify your assumptions?

Josh: Yeah. Most people hate handhelds and waist packs, and when it came to backpacks, in the sport and adventure race especially, we owned everything. My garage literally looks like an REI. It’s ridiculous. We would buy all these packs, and myself and all the racers I knew, we’d buy all these packs all the time. We’d modify them, and they still were only like 50% of what we expected. So, yeah, the market was just so clear that people just paid all the little widgets that don’t really match what a runner wants, or a biker wants. They’re too hot. A lot of packs are just too big and too hot, and overkill for 99% of what you’re going to ever use it for. So, yeah. The validation was really pretty easy, at least from a concept perspective. Fit was always unique. But yeah, the validation was quickly and easily there.

Felix: Yeah. So, you noticed that your friends, yourself, you guys were modifying the packs, the products that you were getting from these much more established brands, but still weren’t happy with the modifications, so you recognized that maybe there is obviously a problem with what exists today. So, what were the first steps towards solving that problem? Did you go into design right away? Did you already know what to design?

Josh: Yeah, kind of. I mean, really, I had the idea in my head for 10 years. I was watching the Tour de France one year, and it was the year Lance Armstrong and Jan Ulrich were battling up Alpe-d’Huez, and I remember seeing Lance was on form, and his body just didn’t really move on the bike, where Jan Ulrich was dancing all over the pedals going left and right. As odd as the correlation is, in my head, it made me think that from a runner’s perspective, where is the area of movement.

Runners don’t necessarily go in and out of form, at least not to a level that impacts a performance of a pack, but you basically go from running nice and smooth, and your upper back stays very stationary, or at least very … It doesn’t move like your hips. It kind of just goes slightly up and down. Your thoracic area kind of rotates, and your hips almost go in a circle with how it makes a pack move, anyway. So, it’s kind of that weird tie-in that always had a … I guess it said in my head that that should be an area that your pack should be, but it should only be there.

So, yeah. I mean, literally, the idea was there for 10 years, it was just out of frustration one night after a long day of training that I finally actually did it. I just went into the garage and I took a waist pack, cut it up. I took water bottle, and a gun holster, and some tie down straps, and sewed this little concoction together, and then I had a very crude concept of what we wanted. The biggest challenge really, from there, was that … The function was there, it’s just, it looked like it worth about $2, and the figuring out a way to build it to where there’s more value add to it, and make it to where it’s actually cosmetically appealing, and finding someone that actually knew how to sew far greater than my hotel sewing room kit skills. That was where everything really became quite tricky.

Felix: Gotcha. So, this balance that you’re talking about, between function and form or design, to make it look more valuable, or add more value to the product so it doesn’t look like something you just put together. Talk to us about this, because I think this is an area that a lot of entrepreneurs are at, where they have a great solution for a product, but it doesn’t jump out. It doesn’t jump out at consumers because they have not done that design side of it. Talk to us about the process you went through to figure this out.

Josh: Well, so I first started with, what is it that I want to take with me on the run? That’s the number one goal. So, for me, I wanted to carry my phone, chapstick, electrolytes, water, obviously, and back up hydration mix, and then potentially, keys, wallet. That may not be all the time, but those are going to be things, especially racing, you’re likely going to want to take with you rather than stashing it in your car in parking lot. I always joke and tell people if I really wanted to steal cars for a living, I’d go to a marathon, a half-marathon, and I’d go look in the gas cap, under the bumper, in the windshield wipers, where everybody puts their keys. It’s so crazy to me. So, I always, with every pack I design, I always make sure we have an area for wallet and keys.

So, we kind of started with that core functionality, and then from there, I wanted it to be all as quick access as possible. No one ever puts shoulder pockets on packs, for some reason. And even if they have some sort of pocket that’s accessible, it rarely fits modern phones, which is just bizarre. So, we put all the focus on what are the modern phones, what are the biggest phones people are going to have, with reason, anyway, and how do we make this pack work with it. From there, that’s what set the whole design goals which shape the product, and we really matched consumer demand quite well with it.

Felix: Nice. So, did you ever have to hire work with a designer, or was this all done in house?

Josh: Yeah, so I did. I kind of worked, basically, with a prototyper. On the first pack, anyway, our HydraQuiver, the … I worked with a guy in SoCal that was awesome. He knew the products, he knew backpack manufacturing well, he knew how to sew really well, and he knew materials really well. For me, I may be a material expert when it comes to sheets and rod stock of plastics and metals from the medical device side, but I don’t know hardly anything on the materials side and soft goods. So, he was invaluable on just understanding where do you even buy this stuff. I’d show him other packs, I’m like, “I like this material. Where do I buy this?” And that alone was invaluable, but then figuring out shape. Figuring out the shape of the pack and how it works with your body, it’s crazy.

I mean, of all the packs I’ve built now, I’m finally getting to where I feel pretty confident that I can build a pack and it’s probably going to work pretty good. But in the beginning, it’d take 20 different iterations just to get the harness built properly to where the pack didn’t feel horrible. It’s actually amazing how complicated that is, and especially to fit a wide variety of frames. So, yeah, he was instrumental with really getting our prototype from this crude concept into something that is actually pretty close to marketable. Our first launch was good. It was quite industrial looking for the first 200 or 300 packs we built, but then we began to refine it from there as I began to learn more, as I got partnered up with better production manufacturers, and the whole line began to grow, really, as I learned a lot more and just got partnered with better people.

Felix: Now, this prototyper, how did you find them? How do you actually work with someone that specializes in creating prototypes?

Josh: In the soft goods industry in the United States, it’s horrible. It’s about the most impossible thing to find when it comes to someone that prototype packs for you, and also find production. It’s actually one of the hardest things, biggest challenges we ever had, and I almost gave up in the beginning because I just couldn’t find anybody. So, the guy I found was totally random, actually. Actually, an ex-colleague of mine knew what I was doing, and he told me, he was like, "Hey, man, you ought to hit up my buddy Mike Burgy. He prototypes stuff and he builds backpacks for parachuters, and some military stuff, and that’s what he does. It was just such a random, weird … He just sent me his info on LinkedIn, and I ate him up. Next thing you know, we were off into the races.

But aside from that, I’ve hardly ever found anybody, or, the people I have found that I wanted to work with over the years, they wanted, minimum, $100,000 retainer, X amount of deliverables. It was ridiculous. Good luck to them. I hope that they find all the military contracts in the world. But from helping out someone as a small brand, that’s definitely not in the budget.

Felix: Now, do you feel like this was a step that is a requirement for anybody that is looking to get into this space? Is it easy to figure this kind of stuff out on your own?

Josh: No. No, it was horrible. This industry is one of the worst when it comes to designs of websites, like search engine optimization, for example. You can just go in and try searching for 400 [inaudible 00:11:45]. You don’t have hardly any of the manufacturers come up. If you search for backpack sewers, contract sewing manufacturers, you won’t probably find hardly anything, and the ones you will find, you’ll call them, and they won’t even call you back, because most of them are only looking for A, military contracts, because they need big revenue, because it is expensive in the US. They generally know commercial people like myself. They’re selling direct to consumers. They know a lot of us are just going to take it overseas, because that’s just the way it is. It’s too expensive to produce in the US.

The other side you’ll find are just sewers for shirts, and blouses, and that type of stuff, which is a whole different industry, and those don’t cross over. So, yeah, the challenges in the beginning … Well, to really put it right on point, I went on Harris InfoSource, which is kind of a manufacturer’s database, and I looked up sewers. I found 40. I reached out to 40 of them, only three responded to me. Two of them told me they were full, and they just didn’t have any interest in helping me, even though I told them, “Look, I have money. I’ll pay you. What’s it cost? $5,000?” I was like, “I’ll pay 5,000.” I had no idea. But I was just throwing it out there, because at that point, I was kind of desperate to find somebody.

And then the other third guy that reached out, I just didn’t get a good feeling from, and they were 200 miles across LA traffic from me, so I just decided to scrap it. And then, like I said, just the stars kind of aligned from my prototyper. He hooked me up with a production factory, and then from there I started chatting with other people in the industry, and over time I finally found some great manufacturers. But yeah, it was crazy. Crazy trying to start out.

Felix: This prototyper helped you create that initial prototype and also helped you get the connections early on to find the manufacturers?

Josh: Yep. Exactly.

Felix: That’s great. So, you do work with a prototyper to, let’s say, just focus specifically on the prototype itself. What’s your, I guess, contribution? How do you help them do their job?

Josh: It’s definitely fit, form, function, features. I mean, those are the really four key requirements that I’m communicating with them. I mean, I went down, and I’d physically work with them, and I’d say, “Okay. I want the phone to be here. I need the back to be this size. Let’s play with the tension on the bottle holder.” Really, everything. He just knew how to do things I didn’t even have the equipment for or didn’t really know how to do. So, it was very team effort to get it going.

Felix: Gotcha. How long did this entire process take from finding that prototyper to having something ready to go to the manufacturer?

Josh: It took 10 months nonstop. We were very active, but it still took 10 months to launch.

Felix: All right. So, I guess that means multiple iterations, and multiple back and forth, so on, figuring out where you want to move things, where do you want to put things. How did you know, though, that it was a product that was ready to go to a manufacturer? What did you see or feel to determine, okay, this is what we’re going to go with?

Josh: Well, fit, form, and function were all great. I was really happy with that. There were issues with maybe certain materials that were heavier than we needed to use, but I erred to the side of caution from a durability perspective, from a functional perspective. So, when we went to market, it was a little more … It wasn’t your consumer … Like, if you go REI or wherever, and you buy a backpack, it didn’t look as pretty. It looked military tough, but it didn’t look like Svelte’s fast runner sleek lines and all this. We were using cool fabrics and cool materials. That wasn’t the problem. It was tough as hell. But it just didn’t look true consumer ready. It looked like I was designing it for firefighters and military. I love that look, but I wanted to clean it up.

So, we just a hit a point, though, where I knew that A, I didn’t know enough. B, I didn’t the right resources and connections to even take a step further. And then also, I thought, “You know what, who knows if this is even going to work? So, let’s get this product to market test it out. See if consumers like it. Let’s see if we actually can sell it.” Because you can tweak designs forever. I mean, I’ve worked on designs for two to three years before I’ve actually brought in stuff to market at this point. Finally you hit a point where it just clicks sometimes. At least now, almost every design, when I brought it to market … Well, every design I brought to market, I should say. It’s hit a point where it’s just clicked, where I’m like, “Yeah, this is it. We’re ready.”

But the HydraQuiver, that first product, it was just a … It’s time. It’s time to test out our concept. And then from there, we knew we could refine it, assuming we’d learn, and be able to move forward.

Felix: Gotcha. So, when you decided to go and run with it, how long did it take before the manufacturers were able to produce the initial batch for you, and do you remember how many products you ordered from them?

Josh: Yeah. We started with 200 packs, and it took about six to eight weeks, somewhere in that range. We started getting partials in six weeks, eight weeks it was complete, and that’s been kind of typical for US manufacturing. It’s between four and eight weeks, depending on … First builds, usually six to eight. Subsequent, in production, are generally four to six.

Felix: Now, because you have experience in manufacturing in a different industry, and now in this industry, where you’re creating these packs, where do you see entrepreneurs kind of slipping up during this process? What are the most dangerous areas that you see entrepreneurs get into when they are looking to manufacture a product like this?

Josh: One of the things I’ve always seen, and it always drove me crazy in the device space, was simply missing core things. It all comes down to fit, form, and function. Those are really the three core things you always have to think about in a design. So, yeah, fit, form, and function are really the key elements that I see many companies miss. They’ll focus on a design that looks amazing, but doesn’t perform like you want. Say, if it was a backpack, it’s too hot, it’s too big, it’s too bulky, it’s missing a key feature like a key clip. Or, it’s missing some quick access pocket you’re going to use consistently on a run. Or, other products I’ve seen in the market, custom designers will put too much focus on maybe the materials, but maybe on the function it’s missing things too.

So, there’s just so many times that we just see one of the fit, form, or function aspects are just largely off. And a lot of times, in my side of the business, I see brands go to market with materials that are just too cheap. That’s not fair, actually. They’re too thin. They focus too much on being weight conscious at the consequence of quality, and there’s definitely one of our competitors out there that I’m blown away, because they actually make really nice packs, but they make the material so thin in the packs so they can be the lightest pack on the market, or one of the lightest. But the consequence is that they rip and not even last very long at all. So, it’s always a frustrating part for me to see. I feel if you’re going to buy a product for 100, 150 bucks, whatever it is, it should hold up, and there’s just so many others I see go to market that are not designed in a way that quality is the number one objective.

Felix: Yeah. Now, fit, form, and function, these are all interrelated, right, because changing one can affect the others. So, how do you test these? Are you able to test them independently, or how do you test to make sure that you’re hitting all of these three key factors of what you’re creating by looking at it holistically?

Josh: Yeah, well, we put them to work. I have five new packs here right now that I just got in. I just spent nine days with my manufacturer, working on taking my prototypes of these five packs into production. Well, into production an approved sample. So, they basically took what I did and they copied it. But they copied it with the production materials that we were specking, which were different than what I had prototyped in. So, it is crazy how all that will change things. So, we changed a mesh from the mesh that I’ve been using on all of our packs. We changed it to a mesh that’s slightly lighter, more breathable, and more durable.

So, it was a win all the way around, but it impacted so many things, that we ended up spending five days of the nine just working on redesigning each feature to make sure it still performed the same or better than better, because the mesh just didn’t move the same. It didn’t stretch the same. It didn’t lay the same. So, we had to change so many things for something that was seemingly so simple. Basically, imagine you wear a concept today, you wear a different concept tomorrow, and they both fit totally different. That’s basically how things worked. So, yeah, once we get things in, there’s a lot I know by just … Does a phone fit in this pocket, it’s easy to check.

But there’s so much that you’ll make one little change with materials, and you think it will be fine by trying it on in the conference room, or the lab, but then you go out and you go for a run with it for a couple two to three hours, or you go for a bike ride with it, and you may find that you really screwed up, and you need to go back to ground zero and start over again.

Felix: Now, I think what you’re getting at, too, is that the key is to identify these trade offs, understanding which trade offs you can live with, and which ones you cannot live with. So, on the other side of this, where do you think entrepreneurs might spend too much time on during this manufacturing phase that maybe doesn’t matter that much in the grand scheme?

Josh: Well, it kind of goes back to the HydraQuiver launch. I mean, you can focus on all the little tiny details for an infinite amount of time and never get a product to market. So, there has to be a point where you draw a line in the sand of your design goals. Did we hit fit, form, function? All these featured goals that we were really hoping for? And the answer is, if it’s there … And if you have no idea. If it’s something totally unique, it just will hit a point where you need to get it on the market. You need to get it out in consumers’ hands, because they will give an infinite amount of feedback. I see just too many brands, they waste too much time in the idea phase, and don’t ever execute, or they may take way too long to execute. By that time, it’s too late. So, yeah. Definitely got to get it to a point where you hit all your design goals, you get it looking good, and you get it to market.

Felix: Gotcha. So, let’s move on this phase of your business. Once you have these 200 or so packs back from the manufacturer, what were the steps you took to get it into the hands of the consumers?

Josh: So, we had the idea of using Kickstarter to document the demand to retailers of why our concept is different, because our concept is very different. There’s nothing like it on the market. We knew we were creating our own product category. I didn’t know anything about specialty retail. I didn’t have any contacts in it. I didn’t really know what I was doing. So, I wanted a way that I could show them, “Look, we had a successful crowd funding campaign. It’s amazing. Blah, blah, blah.” That was kind of the goal to retailers, but also to consumers as well. I wanted to obviously sell product, pre-sell product. So, what we did, actually during the build, we launched an Indiegogo campaign, because Kickstarter, at least back then in 2012, they didn’t allow backpacks or basically backpacks. So, they have all these weird little requirements that they won’t allow. Now they seemed to open it up.

But we were really crushed, because we’d filmed the videos, we’d submitted everything to Kickstarter, and they said, “Yeah, sorry. We just don’t put stuff like this on here.” So, we went to Indiegogo, which is another crowd funding platform like Kickstarter, but they also have all kinds of random stuff on there. Like, they have, “Debbie has a crack addiction and needs money to go to clinics.” Serious. I mean, I had someone send … They sent me an email with that exact thing. And they’re like, “Hey, is your campaign legit?” This was a friend or a family member of mine. I was like, “Yeah, yeah, it’s legit. They just have a lot of weird things on here too.”

Our hearts weren’t into … They weren’t into it. So, there were two problems that we had. A, our hearts weren’t into this crowd funding campaign. We knew we were building the product anyway. So, that was our marching orders. We at least wanted to make sure we fund, and we did. We hit our goal, we funded, and we had the documented evidence we were hoping for. But we really just kind of started with friends, family, emailing out to them, social media, and we started posting randomly on Facebook. But we just really didn’t know how to reach our audience, and the really first approach was get a website up and going, hope to sell it, try to get press. We worked that angle as much as we could. But it was really grown through this specialty retail channel.

The biggest challenges we really found in specialty retail is that they were like, “Yeah, I don’t know who you guys are, and I don’t think people will use that, because I’ve never had anybody ask for it before.” And I was like, “Well, of course they haven’t asked for it before. No one’s ever made anything like this before.” So, we kind of hit these big roadblocks in specialty retail and we realized we had to build demand first. So, that’s what really launched us into this never ending goal of Facebook advertising, and that’s really where we started the whole channel and started our whole business growth was really thanks to Facebook.

Felix: Nice. I like that, that you understood that because these specialty retail stores said no, it didn’t mean that there wasn’t a market for it. You had to create the market. You had to educate the consumers on it. So, I want to talk about that in a second, but before we get there, this feedback that you’re looking for by getting the products into the hands of the consumers, what were you looking for? What kind of questions or what kind of answers were you looking for when you were getting this product out to consumers?

Josh: Everything. So, fit was a big one, and every time I launch a product, I’m always really excited to hear fit, because each time I launch a new pack, I always feel like I always improve it just a little bit, based upon all the feedback we get. Every day we get feedback, and I always will make these itty bitty little tweaks that maybe fit a petite female better, or maybe a super large framed guy or gal, or large-chested lady. There’s all these challenges when it comes to fitting a backpack to a runner that is quite complex, but one thing that we really strive for, we take … Every email I get, or every call I get, I either put it in the design folder, or I save it to a customer follow up folder, and I make those notes for future designs.

So, it’s always the goal of getting it out there, and getting feedback of saying, “This pack fits me great,” and then I say, “Okay, cool, thanks. Can you tell me your body type? Can you tell me chest size, height, shoulders, type of build,” and from that we keep building basically this little portfolio or database of sizing, and how different packs work on different people. That’s invaluable. I personally feel we’ve really nailed it at this point, where we actually have one pack. We don’t have multiple sizes. This one pack size, between each product, it all fits, like 99.5% is our swag, percent of our customer base, which we’re really, really excited about.

Felix: Yeah. Why is the fit … Why is that the one that excited you the most over form and function?

Josh: Well, form and function is kind of a given. But fit is the hardest thing. You can have the coolest form and function on the planet, but if it doesn’t fit most of your audience, then you’re SOL. So, form and function are obviously a major focus, but at this point, with each pack especially that we launch, whether it’s a new iteration, or a new concept, we have what we continually hear from consumers with what they want, and we know that pretty well at this point. So, that’s kind of the easy one. I guess that’s the shoe in. It’s really fitting people. That’s the hardest part, is to make everybody happy.

Felix: Makes sense. Okay, cool. So, let’s talk about your efforts to build demand for the product. You guys went straight to Facebook, Facebook ads to deter … To reach your audience. What were the first steps? How did you approach Facebook advertising?

Josh: Pretty ignorantly, in the beginning. In our reality, we didn’t really know anything. Facebook advertising has gotten a little bit simpler over the years, but in the beginning, we just didn’t know. And plus, it seems like a lot of money when you’re first starting out. I remember $5, like, “Gosh, $5 a day, it’s $150 a month.” It doesn’t sound like anything now, and to most brands, it won’t be. But when you’re brand new and starting out, that’s intimidating. You’re like, “Can I do $2 a day?” As silly as it is, it’s that first little factor that … It just adds up, right. So, we would go in and create different ads, but we really weren’t getting conversions. We didn’t know how to track them, so that was a major problem in the beginning. We could see what Facebook would report, but we knew it wasn’t making sense, because they’d show we made like $10,000 a day, when we definitely did not have $10,000 in sales.

So, we had Facebook pixel issues on our website, and analytics issues, and just all kinds of little weird quirky things. So, the main thing that we did in the beginning, and what we found that worked well, actually exceptionally well, was promoting our Facebook page. We tried different pictures. We finally found one picture. It was one picture that outperformed magnificently over the other pictures. It was this girl, it was our social media manager at the time, wearing our pack. Women in pictures, they do respond … People, the audience, male and female both, responds better, that we found, to women over men. And even the coolest pictures with guys hardly ever get the attraction that women do. It’s crazy.

So, we found this one picture. When we promoted our page, we got tons of page likes, tons of engagement, lots of people looking at our brand, and it was amazing. That was really the first turning point for us, was that just simply promoting the page worked great. For anybody listening to the podcast, I will say we don’t hardly ever do that anymore, because Facebook changed a couple years ago, and basically made your audience extremely hard to reach if you’re not paying for it. So, we don’t do that anymore at all. Now it’s all Facebook advertising. But in the beginning, that’s how we got our traction, was promoting our page.

Felix: Got it. So, now today you’re still on Facebook, but you’re just driving them to your own site at this point?

Josh: Yeah, it’s all advertising. We post to it organically every day, but yeah, it’s all advertising.

Felix: Now, this one picture that did really well for you, I hear this all the time from people that are running Facebook ads, is that the image is so important. That image is important, they catch people’s attention, and then once you have that, then the rest of your ad can come into play. Now, how many photos did you test early on before you found the one that was the big winner?

Josh: Oh, it wasn’t a lot. It was decent, it was probably six, seven, something like that. When you’re small, it’s one of the goofy things I do see a lot of brands do wrong, and we did it wrong also, is that they have a guy like me, the owner, that takes a picture of himself and the pack, and like, “Cool, this is awesome. Everybody’s gonna buy this.” And you put it up, and it’s some dodgy picture. So, that’s one of the biggest things we did early on, about maybe four or five months into our business, is that we hired a professional photographer to photograph our products, and we really leaned on a lot of friends, family, customers that have bought packs, send us pictures. We’ll put them up in ads.

That’s really when things started to turn, is when we had multiple high quality pictures to choose from, that we really started getting a better vetting process that got better converses, not only in advertising, it’s when they came to our website. A lot of websites, you go to the website and you can’t even tell what exactly it is you’re trying to buy. I mean, you need to have crisp, clear, awesome product pictures with how to use it pictures, and ideally, a video of how to use your product too, and then it’s like conversions go up magnificently.

Felix: Nice. So, what kind of testing do you do today, with Facebook ads specifically?

Josh: We only actually have three active ads running on Facebook, but we have about 70 different ad sets that we run. So, between three campaigns, we only have three ads, but again, 70 different ad sets mixed between them. What we do is focus on different demographics, different interests. So, age is a big one for us. We find that under 30 years old is a very expensive conversion for us, we just don’t convert them as well. We sell to tons of people under 30. But on Facebook advertising, it’s very expensive, so we don’t advertise to them very often. The 30 to 44 bracket is our most optimum, and then 45 to 59 is still good, it’s the second most inexpensive.

But then, really, the key that we drill down on from there is different interests. Maybe someone has an interest in trail running. Maybe it’s obstacle course racing. Triathlon, mountain biking, ultra racing, and all these different disciplines. So, we drill down these different ad sets that identify various criteria that we believe a specific demographic will like, and that’s really why we have so many ad sets, is specifically for that.

Felix: Now, do you change up the images or the copy for each of these ad sets too when you’re targeting different demographics?

Josh: No, we don’t. What we found is that we find a given ad set that works. Our highest performing ad set is … Actually, it’s a … Oh, I forget what … They call it a carousel on Facebook, so we use four or five pictures in this ad that has four or five of our different packs pictured, with male and female, a variety of ages, just randomly, it wasn’t really by design. But we have that carousel running. That’s our highest performing ad. So, people, what we found with is between the black and white and the colored pictures that kind of integrate, I think it pops, it catches the eye, and then from there, if people have an interest, they’re going to go to our website, they’re going to learn more. But yeah, we haven’t necessarily found a specific age demographic or interest demographic buys differently from pictures, at least not that we’ve been able to identify.

Felix: Gotcha. So, when you have identified that one ad set is converting very well, getting you customers, getting conversions for a very low price, and then you have the younger demographic under 30 that you sell a lot to. They are one of your target customers, but they’re much more expensive to reach on Facebook. What do you do with that information? Do you turn off that under 30 ad set, or what do you do?

Josh: We do. Yeah, it’s frustrating, because I guess maybe I should chalk it up to putting just a smaller percentage of expense there, but we do. We turn it off. We primarily focus on the 30 to 44 demographic, because it’s the highest-yielding ad set for us. And we still see a lot of sales in both the other sides outside of that age bandwidth. But the way I kind of see it is, in Facebook’s audience, that’s the biggest demographic that is apparently engaging with our ads, so we might as well keep doubling down on that to keep advertising to them. You still spend a lot of money in Facebook advertising. So, I’d rather keep pushing hard on that and then hope that the other aspects are reached through our other mediums that we use, which there’s still plenty of other mediums out there.

And then I also hope that it will be reached on the ground. I mean, the more people we can get wearing our packs, the more people will see our packs, and the more people will buy them, and that’s going to be a broad range in all these races, all the training. That’s kind of why I focus on minimizing expense as best as possible, to have a successful business of course, and then again, hopefully getting more packs and more people, which has an exponential reach.

Felix: Nice. Now, once you had this assess with Facebook ads, did you go back to specialty retail?

Josh: Oh, yeah. Yeah. We’re in over 400 stores in 45 countries now. Specialty retail was never a … We never really stopped focusing on them. We slowed down the trying to get them to buy something that most consumers didn’t have yet, for a couple reasons. One, a lot of stores, they don’t have time or money to invest in buying the product for themselves, and what we have found is that people don’t respond well to free. People ask us for free products every day. Every single day I get some blogger, or reviewer, or somebody asking for free products, and retailers as well. It’s pretty rare we ever give out free products, because they look at it as, that’s how much it’s worth. It’s nothing.

It’s staggering how many free packs I’ve given out over the years that … You’re talking a couple, a single digit use percentage when it comes to free. If someone pays for it, you’ll have a review up in weeks. You’ll have an active, awesome retailer. Everything is totally different. So, that’s where we found that I couldn’t just [inaudible 00:38:15] five packs to every store out there, because there’s too many of them, and it wouldn’t be smart, and then plus, they weren’t getting engagement anyway.

I wanted to have a whole bunch of consumers that had the packs, that would come in to the store, they’d come in to their demo runs, and [inaudible 00:38:30], “Okay, maybe I should buy it.” And that’s what we see now, in specialty retail. It’s definitely more of the focus … We get more sales from that than we do anything else.

Felix: Now, is this what you meant in the pre interview questions about building a strong ambassador team? Is that what you use today to get into the specialty retail stores?

Josh: Yeah. The ambassador team is awesome as well. So, yeah, we have built out an amazing group of athletes. There’s 212 people now, and it’s just been exponential with what it’s done for our online growth, our retail growth. But really, I guess it’s the … It’s really the horse in front of the cart in that case. So, the ambassadors have built out our online channels, they’ve built out our race reach, and they help to get more consumers using our packs. As a result of that, they get more consumers in front of our retailers, which helps to get more packs in our retail.

We don’t push on them. We’re very open with our ambassador team. I don’t have these crazy requirements like some brands do that you have to go out and exhibit at a store once a month and all this stuff. So, the reach maybe hasn’t been as good at retail as it could be, just because we don’t really ask that of them. But it certainly hasn’t hurt, let’s put it that way. There’s some of them that are very tight in the running community, go to running stores, and they engage with them, and that’s helped a lot. But really, their real big asset to us has been design feedback, and working with the other consumers, and teaching them how to use the packs, and why they should use them.

Felix: Nice. So, when you start an ambassador team, how do you find, I guess, the best ambassadors for your brand?

Josh: So, we have a requirement to be on our ambassador team, you already have to have at least one of our packs and love it. That’s the main requirement. We get thousands of applications a year. It’s amazing how many people apply to be an ambassador to our company that don’t even have a pack of ours. A lot of brands, they’ll accept you like that. We don’t. We want to make sure that you actually … You understand how our packs work, because our packs, they may not work with you. Maybe you just don’t like it. Maybe there’s another brand you like, and that’s okay.

But that’s the first thing. We want to look at, do you have a pack of ours, and what do you think about it. Then from there, we look at social media reach is the primary one. We love Instagram, and Facebook is great too. But we love Instagram. We love seeing high quality of our pack in use, and we just find the reach there is amazing. By seeing people that have great photographic skills, that helps us too. It helps them, helps us. We share their pictures, we go to their accounts, it helps us, grows our business.

But then from there, we look at people that have strong reach in the community, participate a lot in racing and training. Maybe they’re not super big in social media, but that’s okay, because they’re just good people, and they’re a positive influence there in the community.

Felix: Do you have to manage or incentivize them in any way?

Josh: Yeah, we do. We manage them through a Facebook group, private group on Facebook for just Orange Mud ambassador. They really manage themselves quite well, but I guess maybe between myself and social media manager, we at least answer lots of questions, and kind of give ideas, and ask for feedback and everything. But we do incentivize them too. We have a discount percentage that we give to them as a result of being an ambassador, and we give them random kind of free product throughout the year. We give away a lot of free race entries from all the races that we sponsor. We sponsor about 300 races now, so we get a lot of free entries for that.

There’s a few other little perks and whatnot, and plus they get a lot of early design feedback. I use them as a sounding board with new packs that I’m designing where I’ll post a picture or video up and explain what it is we’re doing, why I’m designing this pack, and I’ll just say, “What do you think? What should I change? What should I add? Is there fit issues you saw on this pack that I should be aware of here?” They love it. I love it, and they love it. It’s a win, because they really are helping to shape the goal and future of our company.

Felix: Now, I want to talk about the expanding product line. You said earlier that you now have 27 unique products, and you started with just that one pack. Tell us about your product development process. How do you go through creating so many of these different products for your brand?

Josh: That’s a good question, because it’s kind of funky, really. We moved our business to Colorado from California back in April of 2016, and since moving out here, your gear requirements are more. Especially if it’s really cold, right, and the weather can change really fast in the mountains. So, I began designing a couple packs for me, because I wanted to do some Alpine ascends, I wanted to do some longer, unsupported runs that I needed to have backup gear. That’s very different from the gear requirements you may have in California.

Our newest 12-liter and 20-liter hydration packs are coming out in about late May. Those are out of necessity. I needed them for myself, and as I was building them, I realized we really had a concept that is awesome. So, we’re really excited about that. Another pack we’re launching in May was kind of a hybrid of something I saw at a zip line place once. The guys that worked there had these cool looking packs. They looked really neat, and I think they were just really to hold walkie talkies mixed with going to see Star Wars with my five-year-old.

I saw a penholder that the guy had, and the two … They’re totally different than what we designed, but the two really made me think, “Oh, you know what? I can build a pack in the front that will hold a soft flask, and it’s going to hold your phone. It’s going to fit like this. It looks really kind of cool, and it will be great for obstacle course racing.” So, a lot of times it’s just random. What I do is I keep a list of … I mean, I have at least 100 items on there that I’ve wrote down kind of my core design notes of what I want to do, and I just constantly go through it by looking at our portfolio, seeing where the gaps are, seeing where I think that … We can design all kinds of neat stuff, doesn’t mean we can sell it to more than like 100 people.

I look at what makes sense to design, to be unique in the market, that’s going to have the highest reach, that is going to be a successful product line that fits our brand, and that’s where it just kind of changes throughout the year, depending on where the ideas are stacking up on the list.

Felix: What have you found throughout this entire process? What’s been most helpful to make this development process smoother?

Josh: I’ve learned how to sew really, really well. In the beginning, it was brutal. My manufacturers, I would tell them … Basically what I do is I take other packs and fabric, and I take staple guns, little needle and thread, glue, and I concoct a pack that would barely be held together. Then I take pictures of it, and I photoshop a billion different stages, like 40. It seemed like it was always at least 30 or 40 changes. And then I’d send it to them, and I’d say, “Okay. Here’s the picture. You’re going to see the pack in the mail. I know it’s crude, but here’s what I’m wanting to achieve.”

It was always easy to get to that … Kind of typical engineering rule, it’s easy to get to 95%, but 95% of the work is in the last 5%. Each time, we’d get so close, but then I’d ask for four changes. One of them was supposed to be make that octagon a circle, and I’d a triangle. And I’m like, “How did you even get this?” I’d always be so confused. But I knew it was my own fault. I didn’t know how to make what I needed, and I also didn’t understand it’s easy to concoct things, but it’s different to build it for production.

So, I bought my first machine couple years ago, and now I have four downstairs. I literally learned how to sew really, really well. It’s really exciting. I can make pretty much anything, and as silly as it sounds, I enjoy sewing and making new packs more than anything else that we do. It’s just really a lot of fun. But I also can make packs production quality ready, to where I give it to my manufacturer now, and I say, “Copy this. It’s all you have to do.” And that really cuts down time to market massively, and it also cuts down on confusion. There’s definitely features we’ve gone to market where I’m like, “Ah, man. That wasn’t perfect, but I don’t want to confuse them anymore.” It just didn’t maybe fit what I wanted, but there were times we have launched something where I’m like, “I wish that pocket holder was a half inch taller.” But I knew it was going to impact too many other things that I just moved forward.

But now I build it to exactly what I want. Of course, they may change the way the pack goes together, because I’m still kind of a rookie. I always tell people I’m a beginner expert at photoshop, and I’m really a beginner expert at sewing. I know just enough to do things right, but maybe not do things the way that you should in production. So, they’ll make small changes, but that’s definitely been, hands down, the most successful strategy for us going forward.

Felix: Very cool. When it comes to running your business, any apps or tools that you rely on heavily to help you run it?

Josh: Yeah. So, one of the biggest ones early on, and it’s still my favorite to this day, is Klaviyo. It’s an email automation tool. You can set up work flows. So, we use it as your normal email campaigns and everything too, but what we found, all our packs are different. When you innovate and create something that’s different and nothing else is like it on the market, what will happen is people won’t wear it right, or they won’t know of the features. We get plenty of emails from people saying, “Hey, I love your Single Barrel, but these straps flop around, drive me crazy.” Well, I send them the YouTube video that shows where the little strap keepers are. But most people just don’t see those.

So, what we found is that we used to get lots of emails every week. “Hey, I’m going to send this pack back, it doesn’t fit. It bounces all around, and blah, blah, blah.” I respond to each and every single one, saying, “Hey, here’s a video on how it works. You just need to tension it from the sides, or you need to tighten these straps. You need to do whatever. It’s not designed to be worn loose like a normal pack is.” And that threw people off. So, once I found Klaviyo, they have these email automations that, when you buy a pack from us, I have it set to where three days after you buy it, you get an email. That way, I figure it’s either to you, shipped and arrived to you by then, or it will be there very shortly, and hopefully you won’t delete that email.

But it says, “How to wear your X.” HydraQuiver, Endurance Pack, whatever it is. There’s a video in there, plus text, that tells you exactly how to wear the pack, and the functions of the pack. The reasons why we designed it like we did. That single automation, it almost eliminated emails that we get from people, which is kind of sad in one way. I love to get feedback, and we do still, of course. But usually the feedback we get now is, “Thank you so much for sending this. This is awesome. I just went for a run with it, and I had some questions, and this answered it.” So, it’s been single handedly one of the most effective tools I’ve ever bought, and I’m blown away there aren’t more companies that use it, because I buy all kinds of stuff and I hardly ever get an email other than something asking for me to review a product.

Felix: Awesome. Thanks so much, Josh. Orangemud.com, again, is the website. Any where else you recommend listeners go and check out if they want to follow along with what you guys are up to?

Josh: Yeah. We love our social media channels. We love to be able to see what everybody’s doing. So, check us out. The user ID is Orange Mud on Facebook, Twitter, Instagram, Google, G Plus, everywhere. But really, Instagram and Facebook and Twitter are really our three accounts we love to see our customer base in.

Felix: Awesome. Thanks so much, Josh.

Josh: Thanks for having me.

Felix: Here’s a sneak peek of what’s in store for the Shopify Masters episode.

Speaker 5: If you’re just kind of sitting back and doing a whole bunch of marketing, even content marketing, I don’t think, would continue to sell old products. You have to be continually sort of refreshing your product line, adding new products, taking away the old products that don’t sell. That’s really important.

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About the Author

Felix Thea is the host of the Shopify Masters podcast, the ecommerce marketing podcast for ambitious entrepreneurs. Got something to share with Shopify Masters listeners? You can submit your story for consideration.